US technology giant Apple will ditch sourcing its graphics chip technology for the iPhone and other devices from designer Imagination Technologies (IMG). The relationship will run for another two years but the news still comes as a massive blow to the UK company, which earns a large portion of its profits from Apple.
Imagination shares collapse on the news, crashing 65% in early deals on Monday to 93.5p. That’s slashes nearly £550m off the company valuation and sparks inevitable speculation that it will force a sale of the group.
Elsewhere, the British government has cut its stake in Lloyds Banking (LLOY) to less than 2%, putting the lender on track to be in full private ownership within weeks. Lloyds shares tick over at 66.27p.
British consumer goods maker Reckitt Benckiser (RB.) confirms on Monday weekend press speculation that it is mulling a possible sale of its food business. Other options are also being looked at for the arm that makes French’s mustard but a sale could be used to raise funds to launch a possible takeover of US baby food manufacturer Mead Johnson. Reckitt shares remain largely flat at £73.10. Overall London markets get off to a mildly positive start to the new week, the FTSE 100 index ticking up a modest 11 points, or 0.16%, to 7,335.
Industrial equipment rental company Ashtead (AHT) sees its share price nudge 1.1% higher at £16.72 after striking a £279m deal to buy New York-based Pride Equipment Corp, bolstering its US operations.
Defence engineer Babcock (BAB) slides 1% to 876.5p despite being selected as the preferred bidder to become the Marine Systems Support Partner for the Royal Navy's new Queen Elizabeth Class Aircraft Carriers and Type 45 Destroyers. The MoD programme is potentially worth £360m spread across seven years.
Britain's Virgin Money (VM.) is poised to make a bid for Co-operative Bank, according to weekend press speculation. Virgin Money shares nudge 1% higher to 321.7p.
Oil giant Royal Dutch Shell (RDSB) has pulled out from the Kakinada gas project in India, according to reports on Monday, although the stock barely reacts, staying largely flat at £21.985.
Resources minnow Nyota Minerals (NYO:AIM) has failed to convince board members to back a proposed rescue funding. An extraordinary meeting has been called for 4 April where the cash-strapped mining company’s future will be thrashed out.
